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NSW Separation - Can I Take My Name Off Joint Loan?

Discussion in 'Family Law Forum' started by Favourite Man, 27 November 2014.

  1. Favourite Man

    Favourite Man Member

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    I have a dispute with my wife and in seeking reconciliation, she manipulated me into taking a joint loan ( loan agreement) to get her a car because she has a bad credit history and the car was purchased on her name. Now we have ended up separating and I want to take my name of that loan. What do I do?
     
  2. Rod

    Rod Well-Known Member

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    Go to the family court and request property split. It will be the start of a long process ......

    It is unlikely the lender will take your name off the loan based on your wife's credit history.
     
  3. Sophea

    Sophea Well-Known Member

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    Hi Favour Ezema,

    where a couple hold joint loan accounts, both account holders are liable both in their own right and jointly. This means that the bank is entitled to recover the debt from both of you jointly and/or from each of you individually if there is any default.

    Therefore even if you agree between yourselves that your wife is to take responsibility for the joint debt does not change the right of the bank to require either or both of you to pay the debt. The bank has to consent to the re-allocation of liability for the loan before it will be bound by any such agreement. However, as Rod said, the bank may be compelled to re-allocate liability where a Court has made an order binding on a third party pursuant to family law legislation. Therefore one option is to get the court to reallocate your assets.

    Another option may be for your wife to take out another loan by herself to payout the joint loan on the car if possible.

    Finally, you may be able to discuss it with the bank and come to an agreement whereby you are removed from the loan and your wife is the sole borrower on it, if she now satisfies financial and credit requirements.
     
  4. Graham Doessel

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    Hi Favourite Man
    Your (ex) wife's bad credit defaults 'should' be automatically deleted 5 years after they were placed unless they were escalated to a 'clear-out' which could remain for up to 7 years if it is unpaid.
    Look at the amount of time since she had the bad credit items added to her credit file - If she is now likely to have a clean credit rating, she may be able to refinance the vehicle out of your name.
     

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